Ninth Circuit Adds New Hurdles to Land Exchanges Under NEPA and FLPMA

Center for Biological Diversity v. United States Department of the Interior

On September 23, 2010, a divided Ninth Circuit court dealt a major setback to BLM's proposed land exchange involving Asarco's Ray Mine, and raised the standard for NEPA and FLPMA compliance for land exchanges involving federal lands.

The Ninth Circuit held that under NEPA and FLPMA, the BLM was required to conduct a comparative analysis of the foreseeable environmental impacts if Asarco were to conduct mining operations under the current regulatory regime – i.e., mining on federal lands subject to the federal mining laws – versus the anticipated impacts if the same land was privately owned by Asarco and the federal mining laws were not applied. The case adds a fresh element to the complicated world of federal land swaps.

The decision involved Asarco's Ray Mine complex, a major copper mining operation in southcentral Arizona. The complex lies near 10,976 acres of public land (known as the "selected lands") subject to unpatented mining claims held by Asarco. In 1994, Asarco proposed a land swap which would transfer the selected lands to Asarco, to be thereafter privately owned and mined, and in exchange BLM would receive 7,300 acres of Asarco's fee land. Following public hearings and over sixty comment letters, the BLM issued a final EIS in June 1999 and approved the land exchange in April 2000. The action was upheld by the IBLA and federal district court. The Ninth Circuit, however, reversed.

The Ninth Circuit relied heavily on BLM's assumption that selected lands would be mined in the same manner whether those lands were federally or privately owned. The court began with the premise that Asarco's existing federal mining rights were subject to the environmental protections listed under Part 3809, including the fundamental prohibition on unnecessary or undue degradation. Critically, in the court's view, such protections would not apply if selected lands became privately held, and it was thus reasonable to assume that Asarco's mining operations would be different if the land exchange occurred. By not making a "meaningful comparison" of the likely environmental impacts with and without federal requirements, the court concluded that BLM's action was arbitrary and capricious. With respect to FLPMA, the absence of such a comparative analysis meant the BLM could not validly determine if the public interest was served by the exchange.

Judge Tallman offered a forceful and lengthy dissent. He construed the decision as an example of judicial activism, informed by an overly selective reading of a record that actually revealed a careful and detailed evaluation by the BLM. Because Arizona's state-based environmental protections would apply to the selected lands after the transfer, as well as federal environmental protections for water, air and endangered species, Judge Tallman believed BLM could soundly conclude that mining impacts under federal or state regimens were substantially the same.

The Ninth Circuit's decision, if not elevated for Supreme Court review, adds new considerations for federal land exchanges. The BLM and Forest Service must evaluate whether the use of formerly public lands is likely to change following a land exchange, and analyze the differential environmental impacts. These complications should, however, be manageable with good planning and sound NEPA and FLPMA compliance strategies.

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